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The Journal Editorial Report

News/Business. Paul Gigot discusses news, politics, society and finance. New. (CC) (Stereo)

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John Boehner 8, Paul 7, Steve 6, Washington 4, Dan 4, Boehner 4, Geico 3, U.s. 3, Us 3, Hollywood 3, Mary 3, Obama 2, New York 2, Chris Christie 2, Greece 1, Or Argentina 1, California 1, Hawaii 1, Florida 1, America 1,
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  FOX News    The Journal Editorial Report    News/Business. Paul Gigot discusses news,  
   politics, society and finance. New. (CC) (Stereo)  

    January 5, 2013
    11:00 - 11:30am PST  

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i hate the deal, i think it was the least rotten apple they could have gotten. >> paul: a rancid deal and i don't like the spinach reference. how much damage is there to the economy from in bill? >> well, i prefer the least rotten apple thanh. i think that the two big problems here, people who believe that the rich should pay more do not understand the effects of marginal rates. when you raise marginal rates-- >> the next dollar of income that you earn. >> right, it lowers the incentive of the people that you want it take risk and to innovate and to create. that's one problem. so it will affect the growth of the economy. the other problem is, it does affect tax revenues. the guys with the green eye shades say well if we raise the taxes this much, we'll get this much more revenue. if you lower the incentive of people to take risk, generally what happens, revenue does not
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come in. >> paul: you don't get as much as you think you'll do. >> exactly. >> here, mary, look, the economy seemed, the stock market loved it, the hs blew out the next day and up based on the prospect that something would get done. housing markets recovering. i mean, the economy, the job market not great still, 155,000 new jobs, but the economy does seem to be doing okay. >> well, i think that's probably right, the economy will do okay, but when you have unemployment at 7.8% and it's really stubbornly not pudge r budging, you want to do something-- something more for the economy than just okay, than muddling through. i mean, if you're the president and you can fly back and forth to hawaii, you're not feeling it, but there are lots of people who are feeling the malaise of the economy, the low, slow growth. so, i think it's disappointing that we weren't able to do something that was really more-- had more of a positive impact. >> well, there were a couple of big words attached to the fiscal cliff. one was uncertainty, the
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economy as a business needed certainty and the other was the prospect of a recession. i think the deal probably undoubtedly does avoid a recession. we're not going to have negative growth, but we are probably going to have growth as we have had for about the last two years of 2% or less. so, we do have an economy, but we do have an economy that's bumping along the bottom. in terms of the certainty of the tax deal, yes, we do have that, but on the other hand, the obama health care law is going to be implemented all through 2013. and the wall street journal just reported that only 14% of small businesses actually understand the obama health care law. and so, there is a huge overhang of uncertainty and then plus dodd frank which is going to be implemented through the financial industry. why do we have 2% growth? i think those are the reasons. we have some positive signals for the economy, but not enough to pull it off. >> paul: steve, let me, is there a silver lining here at
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all that maybe the public will begin to understand that you can't reduce the deficit with a tax increase? you just can't do it. this represents what, 600 billion dollars they say over ten years, that's about 6, 7% max of what the deficit is? >> great point, paul. let me step back a minute and say that you and i and dan and eric will lived through the budget deals for 25, 30 years, this is the first and almost none of them have worked out very he well. but this is the first budget deal i can recall dating back to the early reagan years, there wasn't a pretense of cutting spending. usually $3 of phony tax cuts for-- >> there was a tax increase in the deal with extension of unemployment. and now i think the republicans are on a little higher ground as we go forward. you saw president obama in his little press conference after he signed the bill saying this is only the first of many tax increases to come in 2013. i believe the republicans are
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not going to budge an inch on that, i think they're going to basically say, mr. obama you've got your tax increase on the rich now we have to turn to spending and i think that's where the fight is headed now. >> mary? >> i think that anybody who thinks that this gives businesses certainty is crazy. as steve just said, president obama's already saying he wants more tax increases. he's not done with that at all. and there is no solution in the spending side so there's no certainty out there. people are still looking at a very expensive obamacare and no way to pay for it. >> if we can afford it after paying your tax bill, you might want to hire a lobbyist, that's what hollywood did and it was rewarded with more than 400 million dollars in tax breaks in this fiscal cliff deal. we'll tell you who the other big winners were when we come back. i gave birth to my daughter on may 18th,
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five days later, i had a massive heart attack. bayer aspirin was the first thing the emts gave me. now, i'm on a bayer aspirin regimen. [ male announcer ] be sure to talk to your doctor before you begin an aspirin regimen. [ woman ] learn from my story.
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>> president obama for his part praised this week's huge new tax increase saying that millionaires and billionaires will finally pay their fair share under the fiscal cliff compromise, that is unless they were smart enough to hire a lobbyist. those folks managed to get their taxes reduced in the deal, as congress handed out 78 million dollars in tax write-offs for nascar track owners 222 million dollars in tax rebates forum distillers, and 430 million in tax credit for hollywood producers, and
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billions more in green energy give aways. so, mary, i thought this was about social justice, the rich paying their fair share. what happened? >> yes, the rich paying their fair share to her rich people. it's redistribution. >> paul: from the rich to the rich. >> well, we know this is basically how washington works. you have lots of lobbyists working on capitol hill and their job is to get money out of the rest of us and give it to special interest and that's basically what happened here. you remember way back when we when we started talking about this, lower the rates and broaden the base. that's not, you know, even remotely what happened here. it was really just more of complicating the tax code in order to help people who had effective lobbyists. >> paul: if you had talked to the hollywood producers who have their lobbyists, motion picture association, 430
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million, they'd say we need this, if we don't, they'll make films in new zealand or canada and we'll lose that business. wouldn't that be true of any business, too? you could say, yeah, if you don't give them a special tax favor they'll go elsewhere, too? >> yeah, well, i think, if you read through -- there was a summary of all the tax breaks, there was 19 single spaced pages long and i read through it new year's eve and after a while i felt like a sap. why am i not getting a piece of this action, a tax credit for walking to work and saving energy. but you know, everyone is in on it, paul. there's a 355 billion dollars child care credit. conservatives like that credit because it helps families, but there are tuition tax credits. there are adoption credits, a lot of these are pushed by the left as well because a lot of these credits flow back to community action. >> paul: but at least, that's true, dan, at least something like the child credit i don't support it, but at least it's broadly spread out across the
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population. this stuff for hollywood and nascar, this is the most egregious special interest. >> i understand that, but the way the game is played if you're going to do credits for social things, it's hard to fight the ones for the discrete corporate breaks as well because everybody in washington understands that they're all in the same kind of corrupt game to get the credits out of the taxes and that's why tax reform is going to be so difficult. >> paul: steve, one of the themes hereof this bill is increase in taxes on small businesses who often pay at the individual rate in order to channel that money to big business through these tax favors. how do you see it? >> yeah, i completely agree with that. by the way, you know, dan, you should have invested in the algae industry because that's another one that comes out ahead. what infuriates me most about this, paul, is the huge give away to the green energy industry. and you know, you're talking about subsidies to algae, biodiesel and then the wind industry got a massive tax
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credit, a kind of tax subsidy and there is a hypocrisy issue here, paul, because the left keeps saying, oh, the taxes don't matter, businesses don't make decisions based on taxes and that's okay to raise taxes, but the wind industry and the algae industry can't possibly survive if we don't give them these tax benefits. i think the republicans should attack that hypocrisy. >> paul: steve, you said the left or five, six repubcan senators voted for the tax extenders bill in the finance committee. >> great point. >> paul: both parties have their fingerprints on this, and the question i have, why would republican favor something like this? >> well, air exactly right. you know, the iowa senators were very much for this chuck grassley, i don't know when it was that iowa became an energy state, but they now thrive on wind subsidies and ethanol. and so, it's a big problem. i guess i disagree with dan on
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one point, i think the tax code is so rotten right now, it's just so filled with special interest, you've got -- i think it makes the case for tax reform, dan. i think it's just, people are going to say blow the whole thing up and start over again. >> paul: dan? >>, but that's the reason they won't do it, because so many got a piece of the action and makes it so difficult. >> paul: can you argue this, mary, increases or decreases the likelihood. >> it decreases for sure because once you get that special interest, i mean, we know this from public choice theory, that special interest becomes so much more powerful and will use 24/7 as power to protect that, that carve out. >> paul: steve is arguing the worst the better. it gets so bad and the public answer, anger. >> my answer to that is argentina. (laughter) >> this is always mary's trump card. she always goes--
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it can get worse. >> let me discuss one thing that i think what really scares me about the whole algae and sludge tax credit is that these politicians don't seem to understand at that we're sitting on a gold mine of natural gas and fossil fuels and that's what we need to exploit if we're going to get this economy moving. >> paul: okay, still ahead, john boehner elected this week to a second term as house speaker. now what? can he work with a president who hasn't been very much interested in compromise and can he keep his own party behind him? a look ahead to the 113th congress and the prospect for tax, immigration, and entitlement reform when we come back. let's give thanks - for an idea. a grand idea called america. the idea that if you work hard, if you have a dream, if you work with your neighbors...
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you can do most anything. this led to other ideas like lerty and rock 'n' roll. to free markets, free enterprise, and free refills. it put a man on the moon and a phone in your pocket. our country's gone through a lot over the centuries and a half. but this idea isn't fragile. when times get tough, it rallies us as one. every day, more people believe in the american idea and when they do, the dream comes true. we're grateful to be a part of it.
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>> respect to our
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constitution, with faith in the american people, with hope for the future of our country, i present the people's gavel to the speaker of the house, john boehner. may god bless you. [applause]. >> jamie: john boehner was reelected to his post capping off a tumultuous we cannot to mention a bruising first term as house speaker. with another debt battle brewing, showdowns looming on tax and entitlement reform. can he take on an emboldened president obama while keeping his own party in line? so, steve, very difficult week. everybody's critical of john boehner, but yet, rehe elected as speaker. why is he reelected if everybody is so critical? >> yeah, boy, that must have been a tough speech for nancy pelosi to give, by the way. look, i have been a defender of john boehner. i think he did an exceptional job when he was minority leader in 2009 and 2010, paul,
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really giving very strong principled opposition to the kind of policies that barack obama was promoting at that time, the stimulus bill, obamacare, and so on, holding the republican caucus in line on principled grounds. i think where republicans need to go now is look, we know barack obama is looking at governing from the left. we've seen that just the last few weeks, i think that republicans have to be very principled in opposing those policies and paul, one other thing, they have to get back to the growth message. isn't it interesting that in the last five weeks, nobody, neither party, has really been talking about what's good for the economy, how do we grow jobs and make the private ore p? >> well, steve goes back to 2009 and 10. 2011 and 12 weren't good for the republican house in terms of tangible accomplishments, they were great on liberal governments, but all you could say for it. how does boehner make the next two years better than the last two? >> well, on the-- he has already said there will
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be no more secret negotiations with the president, no more grand bargains, that he intends to go through normal legislative order. >> paul: do you agree with that? >> i completely agree with that. >> paul: why do you agree? >> because for one thing it distributes responsibility if public. people have to vote on things, have to take a position, it can't just be negotiations, no one can understand. the smoke and mirrors of washington. >> paul: transparency there. >> there is a transparency there and allows people to stand up and defend positions they're taking on either side of the aisle. and i think we need a lot more of that, paul. i think we need something beyond john boehner being the face of the republican party. i like mr. boehner, too, i don't think he can carry the ball for the entire party. >> paul: talking younger people, marco rubio, florida senator, and take the lead on immigration, others on tax policy. do you agree with that idea get out of the smoke-filled room? >> oh, absolutely. the president's shown he's not negotiating in good faith in
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those rooms and what he's done is basically made deals and then as the republicans got closer and closer, he pulled the football away and you know, they can't go on like this. i think it's very important that they, going forward, don't let themselves be set up as nearly obstructionist. you know, he's going to try to say this they are going to damage the faith and credit of the u.s. government by threatening default and that that's going to harm everybody. he's going to really try to make them to be the villains and i think they have to turn this around and demonstrate to the american people that the spending is just not something that can go on. i mean, you know, there's simple charts you can put up this that show what happened to the numbers. they led the debate in december be all about tax, tarksing peop taxing people who had a lot of money be the right way to solve the problems and they let it be about that. >> paul: we had a presidential election, dan, where spending
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was on the agenda and the public said, you know what? so what? >> i'm not sure they said that on spending. the only thing he wanted to increase tax rates on the rich and i'm going to take slight issue with mary. i think there's something useful in obstruction over the next two years, the president made it clear he does not intend to do business with this congress, he intends to push his agenda by any means possible and i look back to the 1990's or even the reagan years when george mitchell was the senate majority leader and he used a lot of procedural techniques to oppose policies back then, committee members using investigations to raise problems in the reagan and bush administration. i think the republicans should do that to the obama administration. >> the problem with that strategy is that we have a very sluggish economy and if they are seen as obstructionist, the president's going to be able to blame the failure of the economy on them and in 2014 they're going to lose the house and he's going to be
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able to go ahead with his-- >> but, mary, the president is saying, as he is, any spending cuts have to be accompanied with more tax increases and the republicans don't want to vote for another tax increase because it will hurt the economy and you agree with that, how do we avoid gridlock. >> i'm not saying he they shouldn't try to block them. i'm saying they shouldn't let themselves as being painted as the problem and sitting there trying, all this have rhetoric about how the only thing they want to do is destroy the president. they have to get the facts out there in front of people to show them that. this is not about them being obstructionist, this is about them trying to save the united states from becoming greece, or argentina. >> well, steve, briefly, how important is the revolt, the conservative revolt against boehner briefly? >> you know, there's a lot of agitation, paul. it's not just the republicans, the dozen or two dozen that are angry at boehner. they're also being touted by these outside groups on the right and by the way, in some
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cases i think that some of those criticisms are unfair, but the first job i think that john boehner has to do is reunify the party. if john boehner agrees to any new taxes i think this mini revolt will be a full-scaled revote. >> thanks to all of you, we have to take one more break. when we come back, hits and misses of the week. .so as yous customer satisfaction is at 97%. mmmm tasty. and cut! very good. people are always asking me how we make these geico adverts. so we're taking you behind the scenes. this coffee cup, for example, is computer animated. it's not real. geico's customer satisfaction is quite real though. this computer-animated coffee tastes dreadful. geico. 15 minutes could save you 15 % or more on car insurance. someone get me a latte will ya, please?
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>> time now for our hits and
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misses of the week. steve, first to you. >> shame on chris christie, the new jersey governor who ripped into the republican congress because they haven't approved the sandy disaster relief bill. paul, this is a bill that's filled with pork, 60 billion dollars, only about a third of that money goes directly to the victims. if chris christie wants to blame anyone he should blame chuck schumer the senator from new york who put all the pork in this bill. a lot of people are going to get rich from this bill, paul, but it's not victims from the hurricane and the storm. >> paul: mary. >> a miss for former vice-president al gore of the party that thinks the rich should pay more in taxes. for his attempted tax dodge this week. he sold as part owner of current tv, they sold to al-jazeera, and he tried to get the deal inked before the end of the year so he could pay the 2012 rates instead of the new higher rates. that seems a little
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hypocritical to me. >> paul: okay, mary. dan? >> i have a big miss for u.s. secretary ken salazar ordered a little company drake's oyster out of the national park, so there would be no humans there, would be turned into a wilderness. the problem is that drapes bay are the suppliers of oyster, and no alternative suppliers, and california is coming apart at the seams. >> paul: remember, if you have your own hit or miss, please send it to us at jer@foxnews.com and be sure to follow us on twitter at jer on fnc. that's it for this week's show, and thanks to my panel and hope to see you all here next week. . >> on fox news watch. >> so if you've come here to see your name up in the lights or to pass off a political victory as some accomplishments, you've come
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to the wrong place. the door is right behind you. >> jon: reelected speaker of the house boehner with a message to the new congress. congress approves a compromise deal to avert the fiscal cliff for now. did the media tell what you it does? taxes raised on most wage earners right now, but no spending cuts till later. the house of representatives delayed the vote to give more relief to victims of superstorm sandy causing a reaction almost as violent as the storm itself. >> last night politics was placed before oath to serve our citizens. for me, it was disappointing and disgusting to watch. >> jon: did nbc's meet the press host take his anti-gun agenda a step too far? a liberal newspaper in new york reveals the names and addresses of legal gun owners. the des moines register publishes a gun ban column advocating deadly violence against the n.r.a. and republican leaders. the war in afghanistan is
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still going on, nearly 70,000 u.s. troops still there, but media interest is mia. and get this, mr. global warming, al gore, sells his failed cable channel to a network owned by a big oil producing country. on the panel this week writer and fox news distributor judy miller. richard grinle served as press spokesman for the last four ambassadors to the u.n. jim pinkerton contributing editor the american conservative magazine and justin duckham washington correspondent for talk radio news service. i'm jon scott, fox news watch is on right now. ♪ >> there's no substitute for the wisdom of the people. we here are their servants. as speaker, i pledge to listen and to do all i can to help all of you carry out your oath of office that we are

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